Aberrant DNA methylation patterns in leukemia might be exploited for therapeutic targeting. In this study, we employed a genetically deficient mouse model to explore the role of the methylated DNA binding protein MBD2 in normal and malignant hematopoiesis. MBD2 ablation led to diminished lymphocytes. Functional defects of the lymphoid compartment were also observed after in vivo reconstitution of MBD2-deficient hematopoietic stem cells (HSC). In an established model of Notch1-driven T cell acute lymphoblastic leukemia (T-ALL), MBD2 ablation impeded malignant progression and maintenance by attenuating the Wnt signaling pathway. In clinical specimens of human T-ALL, Wnt signaling pathway signatures were significantly enhanced and positively correlated with the expression and function of MBD2. Further, a number of typical Wnt signaling inhibitory genes were abnormally hypermethylated in primary human T-ALL. Abnormal activation of Wnt signaling in T-ALL was switched off by MBD2 deletion, partially by reactivating epigenetically silenced Wnt signaling inhibitors. Taken together, our results define essential roles for MBD2 in lymphopoiesis and T-ALL and suggest MBD2 as a candidate therapeutic target in T-ALL.